Legislators urge Iran sanctions probe into unknown company

Bloomberg reported that ten members of Congress are urging Commerce Secretary Wilbur Ross to “investigate and unmask” a company believed to have flouted U.S. sanctions laws. (Flickr/nathanmac87 CC by 2.0)

Some Republican legislators reportedly believe an unidentified company may have violated trade sanctions with Iran just as ZTE did.

Bloomberg reported that ten members of Congress are urging Commerce Secretary Wilbur Ross to “investigate and unmask” a company believed to have flouted U.S. sanctions laws. The business, said to be a rival of ZTE, is identified only as “F7” in an internal ZTE document from 2011 posted on the Commerce Department’s website.

“F7 found a big IT company serving as its agent to sign contracts for projects in embargoed countries,” the document alleges. “This cut-off company’s capital credit and capability are relatively strong compared to our company; it can cut off risks more effectively.”

As The New York Times noted last year when ZTE’s internal document first came to light, the description of F7 aligns with Huawei, which the newspaper noted is “a company far larger and more politically sensitive” than ZTE. The legislators also highlighted the similarities between F7 and Huawei in their letter, Bloomberg reported.

Huawei, ZTE and the Commerce Department all declined to comment to Bloomberg for the story.

The Commerce Department last year said it had uncovered plans by ZTE to use multiple shell companies to re-export controlled items to Iran, which would violate U.S. control laws. As a result, the U.S. government imposed export restrictions on the company, preventing ZTE from conducting business in the United States and working with U.S. suppliers like Broadcom and Qualcomm. But ZTE received multiple reprieves from those restrictions as investigations into the company continued.

ZTE last month pled guilty to violating the International Emergency Powers Act, the U.S. Department of Justice said, agreeing to pay a $287 million fine and “criminal forfeiture” of $143.5 million as well as submitting to a three-year probationary period.

It’s far from clear that F7 refers to Huawei, but an investigation could further heighten tensions between the U.S. and the Chinese gear vendor. A U.S. government report issued in 2012 labeled China-based network vendors Huawei and ZTE as security threats that could be used as backdoors for Chinese espionage. Both companies have repeatedly said the claims are without merit, but the report has largely blocked Huawei from selling equipment to the nation's tier-one wireless operators like Verizon and AT&T.